CONSUMER BEHAVIOR ONLINE

THE CUSTOMER’S STORY

A typical one-hour adventure in the life of a 25-year-old professional, Justin:

Tunes his iPod to the latest Diggnation podcast while his TV is tuned to a soccer game and his cell phone and PC are within reach.

Picks up his computer to find a blog mentioned during the podcast, sees a video on the blog and texts a friend about the video.

THE CUSTOMER’S STORY, CONT.

Justin searches for the video title on Google and finds a job posting on Vimeo, an online video-posting site.

He posts a link to the video and Vimeo site to his Twitter stream.

Justin is the new consumer: a multitasker attending to different media simultaneously.

How can a marketer capture dollars from these behaviors?

EXCHANGE OUTCOMES

There are 5 basic things that people do online: Connect Create Enjoy Learn Trade

Each is ripe with marketing opportunity.

CONNECT

CREATE

LEARN

TRADE

21ST CENTURY MARKETING CHALLENGES

Twitter, Youtube, Facebook, Instagram, and on and on…

FRAGMENTATION!! Attention

Demand

MARKETING IMPLICATIONS

Fragmentation makes

reaching

keeping the attention of your customer

ever harder.

WEB 2.0 COMMUNICATION SHOWS TWO THINGS:

Consumers love to interrupt!

Consumers love to talk!

=> Give me some examples…

THE QUESTION IS:

Are you letting the customer in?

CHANGES YOUR RELATIONSHIP

From ‘selling to customers’ to hosting guests

From ‘controller’ of communication (teller of stories) to enabler of communication (resource for stories told by others).

Heard about “meet me at Starbucks”?

http://awesomevideomakers.com/meet-me-at-starbucks/

IN SUM

Online marketers become listeners

BUT WHAT ELSE HAPPENS TO CONSUMERS ONLINE?

Too many choices! Information & cognitive

overload!

HYPERCHOICE AND THE CHOICE PARADOX

We think more choice is better, but there can be problems with excessive choice:

1. Ability to Choose

2. Satisfaction with Choice

THE JAM EXPERIMENT

Tasting booth for unusual jams in an upscale grocery story.

A: offered 6 jams

B: offered 24 jams

What percentage of tasters later purchased one of the jams?

A

B

Iyengar, S. & Lepper, M., 2000, When choice is demotivating: Can one desire too much of a good thing. Journal of Personality and Social Psychology, 79, 995-1006

CHOICE AND SATISFACTION

No choice can be bad.

Excessive choice can also be bad.

Limited choice may be best.

Number of choices

satisfaction

BREAKING APART THE CHOICE PARADOX

E. Reutskaja & R. Hogarth, 2009, Satisfaction in Choice as a Function of the Number of Alternatives: When “Goods Satiate. Psychology and Marketing, 26(3), 197-203.

SO, AGAIN…

We like choice…

SO, AGAIN…

We like choice…

BUT…

BUT

WHERE DOES THIS LEAVE THE E-MARKETER (E.G. RETAILER,

INFORMATION BROKER, ETC. ?

New Businesses and Business models

Search

Curating & subscriptions model (s-commerce)

EXERCISE

Fab.com

Birchbox.com

Mistobox.com

Quarterly.co

Analyze what these sites do?

What need(s) do they satisfy?

THE WORLD BECOMES CURATED

SUBSCRIPTION COMMERCE AND CURATED COMMERCE

Solving the BIG CONSUMER BEHAVIOR CONTRADICTION OF E-MARKETING:

Answer: CURATORS

S-COMMERCE & CURATED EXPERIENCES

Curation: simplicity, convenience, personalization and discovery.

Since 2010 there has been a rise in the number of e-sites offering handpicked item selections, usually on a subscription model that combines convenience, curation and the pleasure of being surprised and taken care of.

S-COMMERCE

Curate & subscribe e-commerce sites

cater to a wide range of consumers’ needs (tea lovers, foodies, fashionistas, new parents

Subscription fees range from the US$10,000 per year for a Net-a-Porter shoe-subscription to the US$39.95 USD for ShoeDazzle and the US$10 per month charged by Birchbox.

CONSUMER BEHAVIOR: CONCLUSION

Consumers become active

Consumer Attention becomes fragmented

Consumer Attention reaches limit

Leads to new value propositions

Curate & subscribe

EXERCISE:

Based on the benefits C&S offers, identify one additional C&S idea.